An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)

This bill was last introduced in the 39th Parliament, 2nd Session, which ended in September 2008.

This bill was previously introduced in the 39th Parliament, 1st Session.

Sponsor

Robert Bouchard  Bloc

Introduced as a private member’s bill. (These don’t often become law.)

Status

Second reading (Senate), as of June 12, 2008
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to give every new graduate who settles in a designated region a tax credit equal to
(a) the lesser of 40% of the individual's salary or wages;
(b) $3,000; and
(c) the amount by which $8,000 exceeds all amounts paid to the Receiver General.
The purpose of this measure is to encourage new graduates to settle in designated regions, thereby curbing the exodus of young people from those regions and promoting their economic development.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

June 12, 2008 Passed That the Bill be now read a third time and do pass.
June 12, 2008 Passed That Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), as amended, be concurred in at report stage with further amendments.
June 12, 2008 Passed That Bill C-207 be amended by restoring Clause 1 as follows: “1. The Income Tax Act is amended by adding the following after section 118.7: 118.71 (1) The definitions in this subsection apply in this section. “base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual ( a) holds qualifying employment; and ( b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment. “designated educational institution” has the meaning assigned by subsection 118.6(1). “designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act. “qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if ( a) the individual begins to perform the duties of the office or employment after January 1, 2007; ( b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and ( c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment. “recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution. (2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of ( a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment and attributable to the individual’s base period; and ( b) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year. (3) For the purposes of paragraph (2)( a), an individual who was resident in a designated region in Canada immediately before the individual’s death is deemed to be resident in a designated region in Canada at the end of December 31 of the year in which the individual died.”
June 12, 2008 Passed That the Motion proposing to restore Clause 1 of Bill C-207 be amended by deleting all the words in paragraphs 118.71(1) and (2) and substituting the following: “118.71 (1) The definitions in this subsection apply in this section. “base period” means the first 52 weeks of the aggregate of all periods each of which is a period during which the individual ( a) holds qualifying employment; and( b) ordinarily performs the duties of the qualifying employment at an establishment of the individual’s employer situated in a designated region or is ordinarily attached to such an establishment.“designated educational institution” has the meaning assigned by subsection 118.6(1). “designated region” has the meaning assigned by section 3 of the Regional Development Incentives Act. “qualifying employment” means an office or employment that the individual begins to hold in the 24-month period that follows the date on which the individual successfully completes the courses and, where applicable, the internships leading to the awarding of a recognized diploma, or the date on which the individual is awarded a recognized diploma that is a master’s or doctoral degree under an educational program requiring the writing of an essay, dissertation or thesis, if ( a) the individual begins to perform the duties of the office or employment after January 1, 2008;( b) at the time that the individual takes up the office or employment, the establishment of the individual’s employer at which the individual ordinarily performs the duties of that office or employment, or to which the individual is ordinarily attached, is situated in a designated region; and( c) the knowledge and skills obtained during the individual’s training or educational program are related to the duties performed by the individual in connection with the office or employment.“recognized diploma” means a degree, diploma or attestation awarded by a designated educational institution. (2) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount equal to the lesser of ( a) the amount that is 40% of the aggregate of all amounts each of which is the salary or wages of the individual for the year from qualifying employment;( b) $3,000; and( c) the amount by which $8,000 exceeds the aggregate of all amounts each of which is an amount that the individual deducted under this section for the purpose of computing the tax payable, or that the individual is deemed to have paid to the Receiver General under this section for a preceding taxation year.”.
June 12, 2008 Passed That Bill C-207 be amended by restoring the title as follows: “An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions)”
May 9, 2007 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

February 27th, 2008 / 3:40 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Thank you, Mr. Chairman.

Accompanying me today are Mr. Marc-André Roche and Mr. Alexandre Cliche. I wish to thank you for welcoming me today to discuss Bill C-207, a bill concerning tax credits and amending the Income Tax Act.

In concrete terms, the goal of this bill is to reverse the exodus of young graduates who are moving to large urban centres and to encourage them to begin their professional careers in the regions which would benefit from skilled labour.

During second reading of this bill, certain members of Parliament asked questions. I would like to take a few moments to address their concerns with respect to Bill C-207.

According to the Emploi-Québec economist, Mr. Clément Desbiens, all regional employment sectors will be increasingly affected over the years to come. In a document entitled “Employment Perspectives 2005-2009”, it was stated that in the Province of Quebec alone, there will be 251,000 positions to fill during this period. In my region of Saguenay—Lac-Saint-Jean, Emploi-Québec estimates that 18,000 new positions will have to be filled during the same period of 2005 to 2009.

In addition, some colleagues have pointed out that this bill should be accompanied by an overarching plan for regional development. I am in full agreement with these statements; however, Bill C-207 is simply a starting point which will allow our regions and regional companies to recruit and retain skilled workers.

In fact, a similar tax credit has proven to be successful for the Government of Quebec. This tax credit was implemented in 2003 and provides assistance to new graduates who are settling in regions that have been designated by the Government of Quebec. The number of young people benefiting from this tax credit has gone from 2,000 to 9,000 between 2003 to 2007. Obviously, this program has proven to be successful in Quebec.

In 2006, the program was launched at a cost of $30 million to the Government of Quebec. If the program were nationalized, this program would cost the federal government $90 million in 2006, which is a small investment if we want to encourage young people to migrate to the regions.

This bill, therefore, seeks to create a non-refundable tax credit. A young person must pay taxes prior to receiving a tax credit of a maximum of $8,000 for a given period.

I therefore ask the members of the Committee on Finance to help our regions support our young people. We must put a stop to the demographic hemorrhaging and the exodus of our young people to major urban centres. We must foster development of our manufacturing and processing industries, by opening the pool of skilled labour to our entrepreneurs.

In conclusion, I wish to add that young graduates in remote areas are fewer and far between. The regions are suffering as a result of the exodus of young people and specialized workers. The acceleration of the aging of the population in our regions is just one of the problems that is the result of this exodus. When a region loses its young people who have special training in specific sectors, a region's vitality diminishes. The exodus of young people undermines a region's ability to innovate. Indeed, young people with specialized training are better educated than those who stay behind.

That concludes my presentation. I am ready to answer your questions. The two people accompanying me will also assist me.

Business of the HouseOpening of the Second Session of the 39th Parliament

October 16th, 2007 / 6:45 p.m.
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Liberal

The Speaker Liberal Peter Milliken

Order. It appears we have a few moments and to save time later I will inform members of something they are just aching to hear about now.

As hon. members know, our Standing Orders provide for the continuance of private members' business from session to session within a Parliament.

The list for the consideration of private members' business established on April 7, 2006, continues from the last session to this session notwithstanding prorogation.

As such, all items of private members' business originating in the House of Commons that were listed on the order paper during the previous session are reinstated to the order paper and shall be deemed to have been considered and approved at all stages completed at the time of prorogation of the first session.

Generally speaking, in practical terms, this also means that those items on the Order of Precedence remain on the Order of Precedence or, as the case may be, are referred to committee or sent to the Senate.

However, there is one item that cannot be left on the Order of Precedence. Pursuant to Standing Order 87(1), Parliamentary secretaries who are ineligible by virtue of their office to be put on the Order of Precedence will be dropped to the bottom of the list for the consideration of private members' business, where they will remain as long as they hold those offices.

Consequently, the item in the name of the member for Glengarry—Prescott—Russell, Motion M-302, is withdrawn from the Order of Precedence.

With regard to the remaining items on the order of precedence let me remind the House of the specifics since the House is scheduled to resume its daily private members' business hour starting tomorrow.

At prorogation, there were seven private members' bills originating in the House of Commons adopted at second reading and referred to committee. Therefore, pursuant to Standing Order 86.1:

Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), is deemed referred to the Standing Committee on Finance;

Bill C-265, An Act to amend the Employment Insurance Act (qualification for and entitlement to benefits), is deemed referred to the Standing Committee on Human Resources, Social Development and the Status of Persons with Disabilities;

Bill C-305, An Act to amend the Income Tax Act (exemption from taxation of 50% of United States social security payments to Canadian residents), is deemed referred to the Standing Committee on Finance;

Bill C-327, An Act to amend the Broadcasting Act (reduction of violence in television broadcasts), is deemed referred to the Standing Committee on Canadian Heritage;

Bill C-343, An Act to amend the Criminal Code (motor vehicle theft), is deemed referred to the Standing Committee on Justice and Human Rights;

Bill C-377, An Act to ensure Canada assumes its responsibilities in preventing dangerous climate change, is deemed referred to the Standing Committee on Environment and Sustainable Development; and

Bill C-428, An Act to amend the Controlled Drugs and Substances Act (methamphetamine), is deemed referred to the Standing Committee on Justice and Human Rights.

(Bills deemed introduced, read the first time, read the second time and referred to a committee)

Furthermore, four Private Members' bills originating in the House of Commons had been read the third time and passed. Therefore, pursuant to Standing Order 86.1, the following bills are deemed adopted at all stages and passed by the House:

Bill C-280, An Act to Amend the Immigration and Refugee Protection Act (coming into force of sections 110, 111 and 171);

Bill C-292, An Act to implement the Kelowna Accord;

Bill C-293, An Act respecting the provision of official development assistance abroad; and

Bill C-299, An Act to amend the Criminal Code (identification information obtained by fraud or false pretence).

Accordingly, a message will be sent to inform the Senate that this House has adopted these four bills.

Hon. members will find at their desks an explanatory note recapitulating these remarks. The Table officers are available to answer any further questions that hon. members may have.

I trust that these measures will assist the House in understanding how private members' business will be conducted in this second session of the 39th Parliament.

(Bills deemed adopted at all stages and passed by the House)

The House resumed from May 2 consideration of the motion that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 7 p.m.
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Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

Mr. Speaker, I would like to thank all the members who spoke in this debate today, as well as the members who spoke in the first debate. Bill C-207 is designed to fight two problems that affect the regions: the exodus of young people and the shortage of skilled labour in the regions.

In the next few minutes, I would like to respond to certain concerns my colleagues have about Bill C-207. According to Mr. Clément Desbiens, an economist with Emploi-Québec, all employment sectors in the regions will be more affected in the coming years. A document entitled Perspectives professionnelles 2005-2009 states that the demand for workers in fields related to retirement will increase. However, according to the study, workers in the regions are likely to leave for urban centres where there are more jobs in sectors such as retail sales, services, administration and finance.

According to Emploi-Québec's estimates, 250,000 jobs will be created during that period. Emploi-Québec anticipates that, for the Saguenay—Lac-Saint-Jean region alone, 18,000 new jobs will have to be filled. According to the economist, the aging of the population will be felt across the country, but its impact will be even more disastrous in the regions. The country's population growth tells the tale. Between 1996 and 2006, that is over a period of 10 years, Canada's population increased by 9.4%, while the population decreased by 8.5% in Newfoundland and Labrador, by 2.2% in Saskatchewan, and by 1.1% in New Brunswick. During that same period, the population increased by 20.9% in Alberta, by 12.7% in Ontario, and by 10.2% in British Columbia.

I would also like to provide other statistics affecting my region. Over a period of 10 years, from 1991 to 2001, the population of the Lower St. Lawrence region decreased by 2.9%. During that same period, the population of the Saguenay—Lac-Saint-Jean region decreased by 2.9%, and I could provide more examples. I now come to the most affected region, that of Gaspé and the Magdalen Islands, where the population decreased by 7.7% over the same period.

This is why we support this bill which addresses all the problems. It is a tool that our regions and regional businesses can use to have access to skilled labour.

The bill provides for a tax credit not exceeding $8,000 over a 52 week period. Some have suggested that it would be better if the maximum of $8,000 could be used over three years instead of one. This is, of course, something we could discuss at committee, and we are open to such a suggestion. I therefore ask all the members of this House to act on behalf of our regions and our young people.

The Conservative members opposite who spoke in the first debate, and in this one, said that the total cost would be $600 million a year. I say that they are trying to scare the public and the members of this House. For Quebec, it would come up to $30 million. So, we are talking about approximately $150 million. I will close by encouraging all members to support this bill, to really help our young people and those regions with a declining population.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:50 p.m.
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Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, today we are continuing the debate on Bill C-207, a bill proposing a tax credit for new graduates working in certain designated regions.

While one can recognize the aim of such a measure and the desire to foster economic development in forming that measure, the proposal in Bill C-207 is saddled with a number of fundamental flaws.

The chief flaw of Bill C-207 is that while it encourages recent graduates to remain or relocate in designated regions, it does nothing to generate new employment in those regions. As a result, it could be argued that the proposed credit would primarily benefit individuals working in such regions regardless of the presence or absence of the tax credit. In that light, such a measure would clearly not be an effective avenue for this purpose.

This also speaks to a larger problem with Bill C-207. The bill proposes to address the issue of economic development in essentially a temporary or fragmented manner. Properly fostering economic development involves a multi-faceted approach responsive to local needs and creating strategic partnerships between businesses and public institutions, the community and other stakeholders.

Canada's national economy is highly diversified across different economic regions with varied needs in terms of workers' skills. The skill sets needed to work in the offshore oil industry in Newfoundland differ significantly from those needed to work in the high tech sector in Waterloo. As well, at any point in time each of these sectors will experience business cycles and economic adjustment.

Economic adjustment is constantly taking place and is a sign of a healthy and flexible economy. Most economically successful adjustments happen naturally and without intervention from government.

Governments, domestic and international, have been moving away from subsidies. Instead they have been focusing support toward fostering high valued added economic activity through education, innovation and infrastructure.

Canada's new government promotes innovation, research and development and post-secondary education through a variety of programs that benefit directly and indirectly students pursuing post-secondary education. For instance, as confirmed in budget 2007, federal investment in granting councils and the Canada Foundation for Innovation, among others, will total $1.4 billion this year.

We also support an assortment of economic development programs totalling $1.2 billion through the regional development agencies, like the Economic Development Agency of Canada for the Regions of Quebec.

The regional development agencies work in partnership with stakeholders to tailor their specific programs to meet the economic development needs of their local communities. These programs include support for small to medium size enterprises which can benefit recent graduates.

The Atlantic Canada Opportunities Agency, ACOA, has a program that provides an excellent illustration of this approach. The export internship for trade graduates initiative provides training and employment opportunities to international trade specialists graduating from colleges and universities in Atlantic Canada.

Small and medium size enterprises receive help to acquire the expertise they need to successfully develop and implement an international marketing plan. Eligible companies work with ACOA and post-secondary institutions to select qualified graduates with training in international business. Together the employer and the intern develop and implement a strategic export plan for that company. At the conclusion of the internship, the employer can apply through ACOA for assistance to retain the graduate's services for up to three additional years.

The Economic Development Agency of Canada for the Regions of Quebec offers other examples of how Canada's new government supports similar programs that involve a multi-faceted approach to regional development. The innovation, development, entrepreneurship and access program for small to medium enterprises is a financial assistance program that fosters the growth of small and medium size enterprises in Quebec, helping these businesses become more competitive in the world markets in activities ranging from product development to marketing plans.

Also, the community economic diversification initiative - vitality, CEDI-vitality, is an initiative designed to support communities in seven regions and 21 Quebec regional county municipalities with slower economic growth. The initiative helps foster economic development by supporting the diversification of the economic base of these communities to create sustainable long term jobs, jobs that will stem, or even prevent, the exodus of youth from these regions.

Small and medium size enterprises, business groups and industry associations can all apply under vitality for assistance in the development of strategies and action plans, capital projects for enterprise startup and business expansion, and marketing of new products and services. The program also assists with the establishment of entrepreneurship support organizations, projects aimed at enhancing cooperation between knowledge institutions, such as universities and colleges, and the business community.

In 2006-07 total government support of these programs will total over $380 million.

These are the types of regional development measures that define a multi-faceted approach. They are forward looking in promoting export markets in an increasingly globalized economy. They involve key stakeholders, employers and post-secondary institutions to help create new opportunities for new graduates, and they work.

Bill C-207 proposes a tax credit nowhere near as well targeted. It proposes a tax credit that would do nothing to foster economic development conducive to job growth. It would do nothing to create the opportunities vital for the retention of those new graduates. Yet the proposed credit would cost up to $600 million annually. I submit that this would be an inefficient use of public funds.

Canada's new government takes seriously the challenge of ensuring Canada is equipped for an increasingly competitive global market. We are all working for all regions of Canada. All young people need to be given the opportunity to acquire the skills and training so that Canada can have a knowledge advantage with the best educated, most skilled and most flexible workforce in the world.

Canadian businesses need to operate in an environment that encourages investment and innovation. When Canada succeeds, we all succeed.

Bill C-207 proposes to use a tax credit to encourage young people to stay in a particular region. Yet it does not help create the type of employment opportunities that would provide an incentive for a young person to stay there. It ignores the varied nature of Canada's economy and that economic adjustment is an ongoing reality of a healthy, dynamic, diversified economy.

The Government of Canada supports regional economic development and devotes significant resources to programs that are responsive to local needs, employ strategic partnerships with other stakeholders and are multi-faceted in their approach.

This Conservative government is working to improve the standard of living and quality of life for all Canadians. This government is working to make Canada a world leader for today and for future generations.

Bill C-207 does nothing like that. Instead, it proposes to spend up to $600 million on a tax credit that would not help create a single additional job.

For these reasons, I am unable to support this legislation. I hope that my colleagues, after taking full account of the larger picture, will decline to support this bill.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:40 p.m.
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Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I am very pleased and proud to speak to the bill introduced by the member for Chicoutimi—Le Fjord. First, I would like to congratulate him.

The bill tabled amends the Income Tax Act to give new graduates working in designated regions a tax credit. This is a concrete example of social and economic measures that Quebec has taken over the years. We have developed all kinds of original social initiatives, such as child care centres.

What about land occupancy? To ensure that our population will continue to have the requisite resources in our villages and municipalities, the Government of Quebec has developed a practice that it has already implemented. It gives a tax credit to a young person who settles in a region, in order to counter the exodus of youth and avoid the shortage of skilled labour.

This measure is available in my region and has had a positive impact. For example, population movement had been declining for a number of years. Now it seems that this measure has tempered matters in this regard. Additional efforts are required to achieve an even better result, to add a sort of catalyst that will result in further progress.

Bill C-207 is a step in that direction because it simply suggests extending this measure to all of Canada by defining the regions where these credits can be claimed. Consequently, in the end, this will provide an incentive for youth to settle in the regions. This is not charity. It is important for all of our land to be used and developed and for benefits to be found in every location. It is to the advantage of the major centres for the regions to be strong. This bill will help make this happen.

The original project was tested in Quebec. It allowed a new graduate to get an income tax credit equal to 40% of earned salary, up to a maximum of $8,000. That measure was implemented in 2003. That same year, 2,500 people applied for the credit. In 2004, it was claimed by 9,700 people from different regions, including 1,200 from Abitibi-Témiscamingue, 1,600 from the Lower St. Lawrence, 800 from the Gaspé and Magdalen Islands, 1,000 from the North Shore and 4,000 from Saguenay-Lac-Saint-Jean. We can easily understand why the hon. member for Chicoutimi—Le Fjord is so interested in the measure. His region did benefit from the initiative put in place by the government of Quebec. Now, we want to broaden the measure.

The experience Quebec has had with it must be taken into account. In fact, the original measure has been amended. The changes made could be included in the bill when it is studied in committee.

I listened to the speech made by my colleague from the NDP and I agree with him. I recognized an interesting principle, a positive way of doing things. For Quebec, the system is already in place and there is no need to reinvent the wheel. We only need to apply the federal tax credit in the same regions where the Quebec credit applies. As for the other provinces, we need to identify the right regions where the tax credit should be offered.

I invite hon. members to consider the results this type of measure can achieve. Young people are moving to the regions and sometimes they stay for a number of years. We would be prepared to consider an amendment, among other things, to spread out the tax credit over three years, like it was done in Quebec. This encourages applying for the credit just once. When someone moves to a region, they often get the urge to invest the rest of their life there and to contribute to the development of that region. The result is quite interesting.

Indeed, an amendment could be adopted in committee to make the tax credit more flexible and make it apply over a number of years. The incentive would have a more lasting effect.

As I was explaining, another amendment could be made with regard to eligible regions to ensure that this will truly be a positive incentive. Furthermore we have to avoid future disputes as much as possible, since there are always borderline areas in these cases. Nonetheless, as far as I am concerned, this issue should not prevent us from implementing a tax credit where it would be appropriate to do so.

Let us take for example the regions I mentioned. My colleague from Haute-Gaspésie—La Mitis—Matane—Matapédia, our party's regional development critic, is certainly aware of this reality.

We have seen the figures for his region in the Gaspé peninsula and for the Lower St. Lawrence. We are well aware that in terms of regional development, we now have to deal with the natural market forces inherent to globalization, which is causing our regions to lose their populations. One might say that that is how the market operates and we have to let the market dictate how this works, but this has a significant impact on support for municipal structures and support for our regions.

When the population of a town diminishes, it does not take long before it can no longer offer services. This disorganization, this de-institutionalization is very negative for our society. In my opinion, it is up to the government to go ahead with measures like this. They do not cost very much and they provide a return. For example, in the medium term, the bill will ensure that schools in villages stay open because young people will settle there, couples will form and children will be born. In that sense, we are keeping the wheels turning and making sure that life can go on in the communities.

It is important to move ahead with the bill so that it can be referred to a committee that will study it, hear witnesses and obtain the necessary expertise. The basic principle is that population movements are not solely a matter of economic markets. It is a question of regional development.

In the past, there were all sorts of initiatives like this that attracted people to regions throughout Quebec and across Canada. We need more such initiatives, because if we do not act, the consequences will ultimately be negative.

Look at what is happening in major cities in countries in the south. Artificial towns are being creating around the cities, where people from rural areas are settling. This is happening in China, and it is creating serious problems.

I hope that we will have the support of the majority of members of this House so that the bill will get through the report stage, come back to this House with any amendments we have suggested and have an impact so that this measure will be implemented in the short term or at least in the next budget. Then, the efforts of the member for Chicoutimi—Le Fjord will have paid off.

In the next budget, there will be such a measure, and it will improve the situation in our regions and their ability to attract young people. I believe we will all benefit from such measures.

My time is almost up, so I will just remind this House that we are elected in ridings and that when a member like my friend from Chicoutimi—Le Fjord has the interests of his own riding and all rural regions at heart, he deserves to be heard by this House. I hope that hon. members will support the bill so that it can move on to the committee stage.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:35 p.m.
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NDP

Charlie Angus NDP Timmins—James Bay, ON

Mr. Speaker, I am pleased to speak to Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions). The designated regions are those regions that have traditionally high levels of youth out-migration.

I am interested in the bill because it closely mirrors work that we have been doing in my office for my region of northern Ontario because it has suffered from massive levels of youth out-migration. It is not just affecting our economic potential but it is seriously affecting the future of our region.

A number of players in the Timmins region have been trying to bring issues to bear on this, such as the Far Northeast Training Board, Northern College and Collège Boréal. Mike Kentish, who has been involved in adult literacy, learning and training, has also come forward with a number of ideas similar to those in the bill.

I find that the bill does have some vague areas which we could actually tighten up in terms of defining what regions would merit this and whether or not a year is enough. I do not know if that is worthwhile. I think young people who commit to returning to a region after a certain period of time would merit the tax credit. However, it is important because some of our northern communities are seeing 20% of their young people leaving and when they leave they do not go back. There are a number of reasons that is happening.

Our regions include the northern mining belt. The gold region extends from Val-d'Or over to Sudbury and Timmins. In the early days the mines were founded by immigrant miners because in those days the mining companies did not want Canadians working in the mines. They hired young men from Yugoslavia, Croatia and Bulgaria on short term work contracts because the work was hard.

My family were immigrant miners who came to Canada to do this work. The miners did not want their children to work in the mines. The old Croatian miners used to tell their kids that they would break their legs if they went underground. That may not actually be what they said but they did want their young people to get an education because they valued it. Those men worked hard and died young so their children could get an education. However, when they got their education they left. Year after year they left and new workers arrived.

However, the economy changed and by the 1970s and 1980s we were not seeing the same level of immigration in the north. Young people were still being encouraged to get an education and leave but now there is a serious problem. However, we do have economic potential in a region where there are opportunities for work but our young people are still leaving.

What do we need to do? We need to start focusing on the trades and training to ensure that our young people have the opportunity to work. In northern Ontario, the young people who want an education go to Guelph, to Ottawa or to Toronto where they spend four years in school. What happens when they finish? They end up with $40,000 worth of debt. While they are there, what else happens? They fall in love and now have $60,000 or $80,000 worth of debt.

We can rest assured that these young people are not going back to northern Ontario because starting over in northern Ontario becomes too difficult financially. As a result, we are losing our best young people who are our greatest resource. They are a much greater resource than gold, diamonds, the white pine, nickel or copper. Our young people are our resources and we need to find a way to encourage them to go back to their regions.

The story in northern Ontario is similar right across Canada.

I would like to talk about the young Franco-Ontarians who must leave northern Ontario to get a post-secondary education or to get a job in Alberta or in southern Ontario.

When young Franco-Ontarians leave a community such as Smooth Rock Falls, Kapuskasing or Timmins, they leave behind their Franco-Ontarian community and culture. When we lose our young people, we lose our future.

It is critical that the provincial and federal governments provide sufficient resources for the construction of a new Collège Boréal campus in Timmins. It is equally critical that we give our young people the opportunity to learn a trade in their own language.

In the region of Timmins, a new Collège Boréal campus is essential for the development of the Franco-Ontarian community. It is essential for the development of a new economy in the north.

We need to work on education. We need to ensure that our young people have the opportunities to get trained in the trades and trained in university in their own regions and in their language so they can stay in our region so that when the opportunities do arise we will have given our young people the chance to stay and to have a new future.

The bill does speak to some of the areas of how we can start to encourage young people to come back. As I said, some more work needs to be done on the bill to fine-tune it to focus on kinds of incentives and where. Right now I think the area is somewhat vague. I do not think all regions of this country need it. We are looking at how to tweak certain areas that are suffering from extreme high levels of youth out-migration. Other areas are much more stable.

However, as federal members we need to recognize that rural Canada plays an important role and that the communities of rural Canada need to be maintained and the vitality of these communities can only be maintained if we have young people who are still living there.

What does happen when our young couples are down in Guelph, Ottawa, the University of Calgary or wherever with their $50,000, $60,000 or $70,000 worth of debt? As we said, they fall in love and stay wherever they are. What happens then is that they have a family and then the grandparents start to go south to visit them. Sooner or later, after the young people leave, the parents leave to be with their grandchildren because it is too hard to be so far away.

The youth out-migration is the first step to the loss of the population of our region and then it is followed by the older generation. Once we lose enough of a critical mass we lose the vitality that holds our northern communities together.

I am very interested in this bill. As a New Democrat, I would be more than willing to work on how we can tweak it to improve it, but it is taking us in a direction that will help us in the north build and maintain the communities that we are so proud of.

Income Tax ActPrivate Members' Business

May 2nd, 2007 / 6:25 p.m.
See context

Liberal

Sukh Dhaliwal Liberal Newton—North Delta, BC

Mr. Speaker, I am pleased to rise to debate Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions).

Let me begin by saying that I believe hot spots in our economy, mostly in urban centres, tend to draw young Canadians away from the less populated regions when they begin to look for work after college or university.

That is why I commend my colleague from Chicoutimi—Le Fjord for recognizing the need to ensure that our regions have the workers they need in order for their economies to thrive. His private member's bill certainly has this principle at its heart.

The bill proposes to provide a non-refundable tax credit to recent graduates who take their degrees into one of the regions identified as a designated region by the Development Incentives Act and find work related to their degree. Young Canadians who meet the qualifying employment criteria are able to claim a non-refundable tax credit of 40% of their salary up to a maximum of $8,000 for the first 52 weeks of employment.

The principle of the bill is a good one. It encourages young Canadians to settle in these designated regions after graduation. During that time, they will hopefully create ties to the local community, develop friendships and perhaps family and then choose to remain there when the 52 weeks qualifying period has ended.

While I have no doubt that the bill would offer some amount of success in achieving this, it does, however, miss the larger picture. The fact is if we want young people to settle in these regions, we need to ensure there are well-paying jobs for them there.

If we were to ask ourselves what is more likely to attract young workers to the regions, a one year tax incentive that will put $2,000 into their pockets if they find employment there, or the creation of real well-paying jobs that will provide for that young person year after year, most people would accept the latter.

What about the people who live in these regions and are struggling to find meaningful employment? In short, what we really need are the kinds of comprehensive regional development strategies that the party of the member for Chicoutimi—Le Fjord is quite simply against.

We need something just like the previous Liberal government's regional development plan. The 2005 budget included $800 million to provide over five years for the creation of new initiatives through Canada's regional development agencies, ACOA, FedNor, WD and Canada Economic Development for Quebec, which received roughly $300 million of that investment.

This showed real investment and real commitment from the Liberal Party, a commitment that the current Conservative government seems to lack.

I will not get into all the details about the views of the Conservatives on regional development as most of us know them well. I could tell the House for hours about how the government, time and time again, fails British Columbians.

I am sure that most of us can recall any number of quotes from the Prime Minister that illustrate his disdain for Canadian regional economic development. We can recall speeches, for example, where the Prime Minister has accused Atlantic Canadians of relying on a “culture of defeatism”, or the Secretary of State (Multiculturalism and Canadian Identity) calling for the elimination of western economic diversification.

Today, we can still see the disregard of the Conservatives for the regions, and all these good things they have done for Canadians, including my constituents in Newton—North Delta. For instance, look at their decision to eliminate the summer career placement program, a program that was designed to find college and university students summer employment, which, for the most part, was in the very regions we are discussing today.

Thankfully, after much pressure, the government relented and reinstated the program by changing its name to the summer jobs program. The Conservatives, however, only gave the revamped program half of the resources of the previous Liberal program. This will no doubt result in many fewer students finding summer jobs in the regions.

Returning more directly to Bill C-207, I believe the bill represents one potential tool that will help to ensure young people settle into regions, but it is just one small tool when what we need in Canada is a box full of tools.

I also have some concerns regarding some technical aspects of the bill. I believe some of the wording needs to be tightened up. For instance, the bill does not clearly define what “employment related to their degree” actually entails. Without clarification the measure might possibly become prone to abuse.

Second, I wonder if the 52 weeks that the bill allows for is a long enough time period to create a real incentive for young Canadians to decide they want to work in one of Canada's designated regions.

All in all, however, the bill does have some merit and I will be pleased to lend my support to it at second reading. I hope, as it moves through committee stage, the members there will give the bill serious consideration and return it to the House with these questions addressed.

Once again, I would like to congratulate the member for Chicoutimi—Le Fjord for his work.

The House resumed from January 31 consideration of the motion that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 6:35 p.m.
See context

Conservative

Dean Del Mastro Conservative Peterborough, ON

Mr. Speaker, it is a privilege to engage in debate today in the House on Bill C-207 sponsored by the hon. member for Chicoutimi—Le Fjord.

Bill C-207 proposes an income tax credit for new graduates taking employment in certain regions. The credit would be equal to 40% of earnings from the first 52 weeks of qualifying employment to a maximum credit of $8,000. “Qualifying employment” would be employment in a “designated region” and employment duties would need to be related to the graduate's education. A “designated region”, for the purpose of the credit, is an area defined in section 3 of the Regional Development Incentives Act.

There are a number of very significant problems with this bill that should be of concern to the members of the House. The bill proposes to create a tax credit to address skill shortages in designated regions but no evidence is provided as to the existence of these shortages. The “designated regions” that the bill references are drawn from a list that has not been updated in more than two decades. It simply does not account for the economic changes that have taken place during that period of time.

The credit proposed in the bill would also introduce very serious inequities in the tax system: inequities between recent graduates and those who graduated early, and inequities between new graduates who work in different regions.

Finally, the credit would entail a very large fiscal cost for a tax measure that would ultimately not result in new jobs for new graduates anywhere in the country. This squanders public money and diverts fiscal resources away from measures that could actually help regional development that do create the type of economic environment within all regions of Canada to help them grow and prosper.

The bill tries to use the tax system to encourage new graduates to work in certain regions of Canada in order to address perceived skill shortages but attempts to do that in ways that, in the end, would make the tax measure ineffective. The bill, for example, would only provide tax relief with respect to a new graduate's first 52 weeks of qualified employment, but if the proposed credit were truly needed to encourage new graduates to work in designated regions, what would happen after the initial 52 weeks when the credit is no longer available?

Why would incentives not be provided to other skilled workers who are not new graduates if the concern is skill shortages in these regions? Clearly, this type of measure cannot yield long term benefits to regions and I am not even sure it would have an incremental impact in the short term beyond reducing taxes for a selected group of workers.

Another concern with the bill is that it does not make any attempt to target skill sets that are in short supply in a “designated region” or could benefit from its development. This makes me question what the economic rationale is behind the bill.

This brings me to a concern regarding the definition of “designated region”. The credit is only provided to new graduates who take up work in a “designated region”, a term taken from the Regional Development Incentives Act. The term refers to a region in which “existing opportunities for productive employment in the region are exceptionally inadequate”.

The list of regions from this act has not been updated in 20 years. This certainly does not reflect the current economic situation of Canada's regions. Let me give two examples to support my point.

On this list, the provinces of Saskatchewan and Manitoba are included in their entirety and yet, in October 2006, both provinces had unemployment rates two full percentage points below the national average, which is presently slightly above 6%. With facts like these, I find it hard to support the idea that these are regions with limited employment opportunities and that new graduates in these provinces should pay up to $8,000 less in federal income tax than those not working in designated regions.

This leads me to my next point, which concerns the significant inequities that would be created if Bill C-207 were adopted. The bill could create inequities in the tax system by discriminating between regions and groups of graduates. Graduates who finish their programs around the same time but live in different regions could face entirely different income tax burdens during their first year of employment. As well, two graduates working in the same job and region but whose graduation dates are a year apart would also face an $8,000 gap in their respective tax burdens. This is patently unfair.

Finally, Bill C-207 proposes a tax credit that is also incredibly expensive. Estimates suggest that the credit could cost up to $600 million each year to the federal government. These are funds that would be taken away from other priorities, such as measures to help make the tax system fairer, foster economic growth and benefit all Canadians, regardless of where they work or live.

I am aware that some provinces have credits or, in some cases, tuition rebates for new graduates who work in their home provinces or who relocate there. Saskatchewan, Quebec, New Brunswick, Nova Scotia and, most recently, Manitoba, have introduced these. Most of these measures are fairly recent and there is no evidence to date that they have had an impact on graduates' choices of where to work and yet Bill C-207 proposes to spend $600 million on a tax measure for which the outcome is completely uncertain.

The success of Canada's economy is well-known by the members of the House. We have the strongest growth on record of the G-7 since 1996 and we are currently enjoying the lowest unemployment rate in 30 years. Given the current economic climate, new graduates can generally find excellent opportunities to work in many parts of the country, including regions that the hon. member for Chicoutimi—Le Fjord seeks to support with generous and unwarranted tax incentives.

An efficient and effective labour market is necessary for a country to succeed in a highly competitive global economy. Workers must be able to pursue the best employment opportunities across the country and practise their occupation wherever those opportunities exist. However, Bill C-207 strives for the opposite. It attempts to use the tax system to reduce labour mobility.

I am sure all members of the House would agree that it is important to support the creation of economic opportunities all across Canada, opportunities that help to keep our best and brightest in this country. I am sure all members of the House would also agree that it is important to provide a helping hand to those who need support in joining the workforce, to attract the immigrants Canada will need in the years ahead and to provide our young people with the training and education opportunities they need to compete in a knowledge-based economy.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 6:15 p.m.
See context

NDP

Denise Savoie NDP Victoria, BC

Mr. Speaker, it is a pleasure to rise and speak on Bill C-207 put forward by the hon. member for Chicoutimi—Le Fjord. This bill amends the Income Tax Act for the purpose of giving tax credits to new graduates working in designated regions. It is designed to encourage new graduates from universities, colleges and other institutions to settle in economically depressed areas by offering them a non-refundable tax credit for the first year.

I happen to represent a region where employment is very high and the economy very strong, but it was not always so. Could this kind of measure have helped, I wondered? It was also helpful, in considering this bill, to have the opportunity, last week, to meet 30 or so young people from rural British Columbia. Among them were new graduates as well as soon to be graduates. This fuelled my thought process and led me to the following conclusions.

In my opinion, the NDP could, with some reservation, support this bill in principle because it would level the playing field for rural communities, given that urban centres have a clear advantage over them when it comes to recruiting qualified workers. The bill would benefit low and middle income families in rural communities across Canada and help consolidate the social and economic situation of these communities by addressing depopulation and youth out-migration.

That said, it should be pointed out that this bill is but a tiny step in the right direction. For example, it encourages graduates to find work in economically depressed areas, but does so only for one year, as our colleague said a moment ago. The Quebec program from which this bill draws, if I heard correctly, takes a more gradual approach, providing a maximum credit of $3,000 per year, up to a lifetime maximum of $8,000. It also includes a financial incentive for three years or more. Personally, I am not sure that a one-year financial incentive would be sufficient to achieve the objectives sought by the hon. member.

Our second reservation about the program has to do with the fact that it could prove to be extremely ineffective if it is not rounded out by a comprehensive regional development plan. The proposed tax credit would be granted to recent graduates working in a region that is, pursuant to the terms of the Regional Development Incentives Act:

...determined to require special measures to facilitate economic expansion and social adjustment.

And, more precisely, a region where:

...existing opportunities for productive employment in the region are exceptionally inadequate.

Is it wise to send recent graduates to regions where employment opportunities are exceptionally inadequate, according to the terms in the act? For the people who already live in such areas, we should be finding ways to create more jobs before trying to draw more workers.

Instead or perhaps in addition to this tax credit incentive, it would be wiser to enhance the summer career placement program as opposed to cutting it in half, as the Conservatives are proposing to do. This would have the benefit of increasing employment opportunities in economically depressed regions.

The Conservatives saw some flaws in this program that are real but should have and could have been remedied. Rural and low employment communities as well as non-profit sector employers in urban areas should continue to benefit from this program, especially in light of the enormous student debt that new graduates are facing at the moment.

In the last Parliament an all-party committee in a unanimous report by the human resources committee recommended substantial changes to the funding allocation formula for the summer career placement program which is presently based on the number of students in the riding.

When the 2001 census numbers were factored into the formula, there were significant cuts in several ridings, especially the rural, northern, inner city or smaller ones. The committee recommended that disadvantaged and rural populations be factored into riding allocation formulas. The committee also recommended that students over 30, often single mothers, be eligible. Right now only students 15 to 30 may apply.

The summer career placement program is a very valuable one for numerous non-profit groups who could not otherwise offer competitive wages or afford to hire students at all to do valuable work in the community; as well, for small town rural business people to help students avoid having to go to bigger cities to find work.

The government is saying it will better target the program to at risk youth and to ensure that profitable businesses who can afford to pay higher wages do not get subsidized.

I agree that the program could be better targeted but targeting does not mean cutting. The government could target better at current funding levels and have a far greater impact.

The NDP would propose instead to restore full funding for the summer career placement program and implement the committee's recommendations that I have already mentioned. The NDP would also get to work in tackling the root of the problem and that is unaffordable post-secondary education especially for rural and low income families. If we want to attract graduates to economically depressed areas, ideally they should be from these regions and be coming home to work.

Right now tuition and other education costs have grown out of reach for even middle income families in Canada. That is the problem that we must tackle. Debt burdens are overwhelming for Canadian graduates and just as they begin their careers they are foreclosing their options and their career choices.

The traditional Liberal-Conservative answer has been to make student loans more accessible and therefore dramatically increase student debt in Canada. It has allowed students from rural areas to benefit and to get post-secondary education, but they simply complete their program burdened with unacceptable debt.

As I said, what we would propose is to tackle the root of the problem by making post-secondary education more affordable, by creating a national program of non-repayable grants that would prevent these huge debt levels. We would also propose to overhaul the student loan system which has become very inflexible.

Retargeting to those in greater need is really a piece of the solution that I hope my colleague from the Bloc, who has proposed this bill, would consider as a partial solution to the problem that is faced in certain areas.

The intention behind the bill is commendable. The bill represents the beginnings of a solution to a serious problem in certain regions of Canada. However, I urge the hon. member for Chicoutimi—Le Fjord to convince his colleagues from the Bloc and all members of the House to support the NDP's vision for post-secondary education, which proposes a global, comprehensive view, in order to inspire hope in our students and in Canada's rural areas and small communities.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 6:05 p.m.
See context

Calgary Nose Hill Alberta

Conservative

Diane Ablonczy ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, it is a privilege to engage in debate today with my hon. colleagues on Bill C-207, sponsored by the hon. member for Chicoutimi—Le Fjord.

The bill proposes to provide a non-refundable tax credit to new graduates who engage in “qualifying employment” within two years of graduation. I will get into what that means in a minute. The credit would be the lesser of 40% of earnings in the first 52 weeks of qualifying employment or $8,000 and could be used over two years.

For the purposes of the credit, qualifying employment would involve duties related to the skills the new graduate attained during his or her education or training, and this work would have to be carried out in a “designated region”, which refers to any of the regions listed in the Regional Development Incentives Act. The proposed definition of designated region is one of the things that I will be talking about in a minute.

I think that all of us in the House want to make sure that all regions of the country flourish and have the workers and the skills they need and we also want to encourage young people to look at not just the big centres, the hot centres, but at the advantages of being in another part of the country. I commend my colleague for addressing this issue.

However, although the proposal before us sounds good in theory, there are a number of inconvenient and rather cold practical facts that I think the House needs to consider when looking at this measure.

The first concern is that there appears to be no clear rationale or specific necessity behind the proposed tax credit. There is a kind of feeling that it would be nice to help young people settle wherever they want even if it is not in a hot centre, but there are no demonstrated facts.

The hon. member has not shown that there is a particular shortage of skilled workers in these designated areas. There are no facts to show that employers in the regions are unable to find the skilled workers they need. There is no evidence to show that even if employers are offering good compensation and working conditions skilled workers are unwilling to come.

If there is a real need for skilled workers, then why a measure that only targets new graduates? All skilled workers wanting to relocate into such a region should be considered.

Why propose a tax credit available to recent graduates if there is no demand for their newly acquired skills in a particular region?

Above all, we need to remember that we are the Government of Canada, so a government putting forward a measure to entice recent graduates to work in certain regions rather than others can hardly be called a good national policy.

These are just some of the gaps in the proposed credit brought forward in this bill. There does not appear to be any concrete reason to provide additional incentives, just some suggestion that maybe people could settle and raise families in certain regions, but they could do that anyway.

I think we have to question the effectiveness of the time-limited credit that would provide tax relief for the first 52 weeks of a new graduate's qualifying employment but then would stop. I fail to see how a 52 week tax credit would really be able to attract and retain skilled workers. I fail to see how we would have people settling and raising families, as the member has talked about, for just a 52 week tax credit. It is more likely that a tax credit might bring people into a particular region for a short term, but they then would move on to greener pastures.

If it is true that a tax credit is helpful, then the very generous tax incentives would be needed for skilled workers to choose work in these regions. If that is the case, if there are generous tax credits needed, then would they stay when those credits are no longer available? Is it good policy? Is it a good use of public funds to pay large subsidies that will clearly produce no lasting benefits? I think we would have to conclude that the answer is no.

One also has to question the appropriateness and fairness of using the tax system to provide benefits to graduates choosing to work in certain regions but also to exclude graduates who choose to work in other regions. A new graduate working in one of these designated regions would be able to earn up to about $56,000 in their first year of employment without paying any federal tax at all, but the same graduate doing the same work a mere kilometre outside the boundary of one these regions would pay an extra $8,000 in federal income tax on the same earnings, and the co-worker of this new recruit would also pay $8,000 in federal tax.

This can hardly be considerable equitable from anyone's standpoint. I think members of this House would certainly expect to hear complaints from those who do not qualify for the credit. This, of course, would result in pressure to greatly expand the existing list of special designated regions and extend it to all workers who are not recent graduates.

One of the other problems is that the bill does not identify specific occupations or skills that are supposed to be in short supply in any of the designated regions. The bill uses some broad language about eligible work being that for which the duties relate to the graduate's training or education, but that would be extremely difficult to enforce.

In practice, those with training and skills in low demand would receive the same tax credit as those with training and skills that are strongly needed. This goes against the supposed purpose of ensuring that designated regions have better access to needed skills. New graduates could come into these regions with unneeded skills or with low demand for their skills and get the very same $8,000 tax credit as those that the regions actually really need, so the bill would not help to encourage specific graduates to stay and relocate where they are needed most.

Another issue to be considered is that the proposed credit may cause undue strain on other regions of the country that are also trying to attract Canada's recent graduates. There would be an $8,000 disparity in the tax burden between new graduates who worked in these designated regions and those who did not. This could mean that regions not fortunate enough to be included in the list of designated regions could experience greater difficulty attracting new talent, especially if they are located near designated regions.

How could it possibly be the role of the Government of Canada to provide incentives to recent recruits to locate in certain regions of the country to the detriment of other regions?

The definition of a designated region leads me to another point, an important point, because the list of these special regions is found in a supplementary section to the Regional Development Incentives Act, which I already have mentioned.

This act has quite an interesting list of regions. For example, the list in this act includes whole provinces and territories: Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Manitoba, Saskatchewan, Yukon, and the Northwest Territories.

All of those are designated regions under the act, so every single graduate working in any part of these provinces would be eligible for an $8,000 credit against federal income tax.

Every part of the country that needs equal opportunity to attract workers based on current economic conditions and labour market needs would lose out because of the arrangement being suggested in this bill.

For example, the entire province of Saskatchewan is a designated region under the act, where, says the act, “existing opportunities for productive employment in the region are exceptionally inadequate”. But the fact is that unemployment in Saskatchewan is currently at 3.9%, well below the national unemployment average, which is just over 6%.

Another example is Manitoba. It is included in the list, but its unemployment rate is 4.2%, again well below the national average.

The proposed credit would provide inequity among the regions. It would involve significant costs. It would also be a disincentive for areas that need particular skills in being able to attract them.

Because this measure is not shown to be necessary, is poorly targeted and is manifestly unfair, I am unable to support this private member's bill. I trust that my colleagues will carefully consider the points I have raised today and also vote against the bill.

Income Tax ActPrivate Members' Business

January 31st, 2007 / 5:40 p.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

moved that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Mr. Speaker, in order to curb the exodus of young graduates to large urban centres and to encourage them to move to the regions to begin their professional careers, I am proposing an amendment to the Income Tax Act to introduce a non-refundable tax credit for new graduates working in designated regions. I myself live in a resource region in Saguenay—Lac-Saint-Jean and I see first-hand everyday the impact of the exodus of young people on our region.

The tax credit would be for individuals who, in the 24 months following the date on which they successfully complete the courses leading to the awarding of a recognized diploma, begin to hold employment in their field of specialization in a designated region.

Recognized diplomas generally mean those awarded for technical training, or college, occupational or university studies. This bill allows individuals, for a maximum of 52 weeks, to benefit from a tax credit totalling a maximum of $8,000. Based on this year's taxation table, here are a few examples of how beneficial such a tax credit could be.

For an individual earning $30,000, the amount of federal income tax payable will be $2,695. This amount will be credited in full with the implementation of such a tax measure for new graduates. If the individual has income of $40,000, the amount of the credit will be $4,172, whereas someone who makes $50,000 will receive a tax credit of $6,000. I would like to specify that this is a credit for new graduates working in designated regions and that these figures represent the situation of a taxpayer without a basic personal tax credit.

I would like to inform the members of the House of Commons that the Quebec government adopted a similar measure in 2003. In the first year after it was implemented, 2,500 individuals benefited from the new Quebec government tax measure. The year after, the number rose substantially, to 9,700 individuals. The measure had a definite impact on several administrative regions in Quebec.

In 2005, many individuals benefited from this tax credit: more than 1,200 in Abitibi-Témiscamingue, more than 1,600 in the Lower St. Lawrence, almost 800 in Gaspésie—Îles-de-la-Madeleine, more than 1,000 on the North Shore and more than 4,000 in Saguenay—Lac-Saint-Jean. In the second year, almost 10,000 individuals took advantage of the tax credit.

These people might not otherwise have come to the regions to take their first job after graduating. In many cases, they came with spouses who decided to look for work in the regions as well.

Last spring, the Government of Quebec changed the tax credit, which is now a maximum of $3,000 per year and can reach $8,000 over three years, rather than over one year. Bill C-207 provides only for a credit for a one-year period. This will make it easier for us to assess the impact of this sort of measure on young people and will let us make any changes that are needed in due course.

In addition to the large number of young people who are leaving our regions, the shortage of skilled labour is a real problem for the regions, which are losing workers to larger centres. Putting this sort of measure in place will stop the population drain and make it easier to develop processing industries by providing businesspeople with the skilled labour they need.

Specialized workers are needed for many regional jobs, especially in primary resource processing and secondary and tertiary processing in forestry, metallurgy, electrical technology and other fields.

Unfortunately, specialized labour is often easier to find in major centres than in the regions, forcing many businesses to move to large cities or close their doors. Without the labour they need, many businesses in the regions are forced to stay small or have trouble expanding. But there is hope for our young people in the regions.

People who do not live in a resource region cannot truly understand the demographic problems many regions are experiencing. Out-migration is having a devastating impact on regional economies. Young people leaving the regions and new arrivals prefer to settle in major centres. We cannot abandon the men and women living outside these centres. Smaller communities are beginning to decline, with the exodus of young people and the aging of the population.

The exodus of young people is not a new phenomenon, but for many years the birth rate compensated for it. That is no longer the case. That is why, for the past few years, the Government of Quebec has been trying to bring young people back to the regions and encourage them to stay there. Some municipalities have decided to follow suit by offering new residents property tax breaks for a certain number of years. For example, the City of Mont-Joli, in Gaspésie, was offering a three-year property tax holiday to everyone who decided to build a new home there. Businesses are also offering a number of incentives to new property owners. This is just one example to illustrate the urgency of the situation.

The Government of Quebec, some municipalities and some businesses are doing everything they can to save the cities and towns that are part of our shared heritage. The federal government must do its part to keep our young people in the regions and encourage them to settle there. That is why I have decided to introduce Bill C-207 on behalf of my party, the Bloc Québécois. I myself am from a resource region, so it is clear to me that both the Saguenay—Lac Saint-Jean and my riding, Chicoutimi—Le Fjord, are in an unenviable position.

In 2006, the Government of Quebec's tax credit for new graduates cost about $30 million. We can therefore assume that a similar program on a national scale would cost about four to five times as much. The Government of Canada can afford such a measure, which is sure to benefit all Canadians and Quebeckers.

Although the situation is not as serious everywhere in Canada, economic activity has gradually been moving from resource and rural regions to larger centres, a phenomenon that, in places like Saskatchewan and Manitoba, is creating economic difficulty in regions with shrinking populations. This situation remains a concern for every one of Canada's provinces.

I would invite members of this House to support this bill so we can help our resource regions and rural communities keep their young people who, in many cases, want to stay.

Income Tax ActRoutine Proceedings

April 6th, 2006 / 10:35 a.m.
See context

Bloc

Robert Bouchard Bloc Chicoutimi—Le Fjord, QC

moved for leave to introduce Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions).

Mr. Speaker, I am very pleased to present my first bill in this House. Its purpose is to amend the Income Tax Act to provide a tax credit for new graduates working in designated regions.

The purpose of this bill is to encourage new graduates to settle in regions experiencing economic difficulties, thereby curbing the exodus of young people. This bill will provide graduates of vocational schools, colleges and universities with a maximum tax credit of 40% of their earnings, up to $8,000.

I am proud to be tabling a bill that will enable thousands of young people in my riding, Chicoutimi—Le Fjord, in my region Saguenay—Lac-Saint-Jean, in several regions in Quebec and throughout the country to work where they grew up.

In closing, I would like to thank my colleague from Saint-Hyacinthe—Bagot , the Bloc Québécois finance critic, for his support and advice while preparing this bill.

(Motions deemed adopted, bill read the first time and printed)